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Wednesday, July 20, 2011

Investing: Upside risk

Individual investors typically understand investment risk as risk of losing a lot of money.  Today, the blog presents two recent articles for investors to consider the opposite risk they assume when their focus is mostly on downside, i.e., upside risk.  "As financial advisors know, a client may think he is avoiding risk by leaving his money in a money market fund—he has certainly reduced the risk to his principal—but he has effectively traded one type of risk for another" (from the first link below)


Smart Risk Taking: Realigning Client Portfolios with Their Long-Term Goals (American Century Investments study pdf)
How the individual investor can trade like a pro (Dash of Insight)

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